Georgia-Atlantic leased warehouse equipment from IC Leasing over a five-year term with semiannual lease payments of $468,683. Using a 10% incremental borrowing rate, the present value of the lease payments on June 30, 2024 was $2,136,000, which Georgia-Atlantic recorded as a right-of-use asset and lease liability. In its December 31, 2024 balance sheet, Georgia-Atlantic would report the lease liability at $2,136,000. In its 2024 income statement, Georgia-Atlantic would report $234,000 related to the lease.

1. On June 30, 2024, Georgia-Atlantic, Incorporated leased warehouse equipment from IC Leasing
Corporation. The lease agreement calls for Georgia-Atlantic to make semiannual lease payments
of $468 , 683 over a five-year lease term. payable each June 30 and December 31 , with the first
payment on June 30,2024 . Georgia-Atiantic's incremental borrowing rate is 10% , the same rate
IC uses to calculate lease payment amounts. Amortization is recorded on a straight-line basis at
the end of each fiscal year. The fair value of the equipment is $3.80 million. Note: Use tables,
Excel, or a financial calculator. (FV of $1, PV of $1. FVA of $1, PVA of $1, EVAD of $1
and PVAD of 51 ) Required: 1. Determine the present value of the lease payments on June
30,2024 that Georgia-Atlantic uses to record the right-ofuse asset and lease liability. 2. What
amount related to the lease would Georgia-Atlantic report in its balance sheet at December
31,2024 (ignore 3. What amount related to the lease would Georgia-Atlantic report in its income
statement for the year ended December taxes)? 31,2024 (ignore taxes)? Note: For all
requirements, enter your answers in whole dollars and not in millions. Round your final answers
to the nearest whole dollar.